Statement by Dr. Shirley Charter,
Commissioner of Social Security,
before the Senate Finance Committee

February 16, 1995

Mr. Chairman and members of the committee:

It is a pleasure to be with you today, and it is an honor to come before you as the President's nominee to serve as Commissioner of Social Security.

I would like to begin with a few words of appreciation.

First, to Senator Gramm, Senator Hutchison and Congressman jacobs for joining me this morning and for their generous words of support.

And I would like to thank those of you on this Committee who took the time from your busy schedules to meet with me individually prior to this hearing. It was good to hear your views and ideas about the Social Security program, and I deeply appreciate the encouragement and support you have given me.

Let me begin my testimony, Mr. Chainnan, by assuring you and assuring the American people that the Social Security Administration is prepared and ready for its new status as an independent agency.

On March 31, we will be ready to meet the challenges that lie ahead. The new, independent Social Security Administration will be an agency built on the foundations of greater stability, greater visibility, and greater accountability to the American people.

I am ready and eager to lead the Social Security Administration into this new chapter in its very proud history.

When I became Commissioner of Social Security 16 months ago, I felt privileged to lead an agency that affects the well-being of over 48 million people. The awesome sense of responsibility at administering a program of such magnitude, and such importance to so many, is a feeling I still have today. But with the privilege of administering the Social Security Administration comes challenges. And the challenges the agency faces today are as difficult as any that have confronted-SSA during its nearly 60-year history.

As the median age of our nation increases, Social Security's work expands. In the fiscal year 1996 budget just submitted, we point out that Social Security's beneficiary rolls will increase by more than 700,000 people that year. That upward trend will only intensify as the baby boom generation moves into retirement in the years ahead.

Claims for disability benefits have increased at unprecedented rates. Calls come into the agency's 800 number at the rate of 64 million per year. Earnings records are posted for 141 milJion working Americans. And demands for service- quicker, more efficient service- are escalating at a time when government is also trying to become leaner.

Over the course of 16 months, I have made a series of decisions regarding these service demands. These decisions have been aimed at reshaping the Social Security Administration into an agency that works more efficiently, that utilizes technology wisely, that emphasizes the importance of responsive customer service, and that meets growing demands for service. I visualize a Social Security Administration that, no matter how large our beneficiary rolls grow, can provide service that is friendly, efficient, swift, accurate and compassionate.

Disability has been the most difficult issue we have confronted. In fiscal year 1989, SSA received nearly 1.6 million disability claims. Last year, fiscal year 1994, that number had grown to more than 2.6 million- a more than 60 percent increase in just five years.

The ramifications of this growth commanded my attention immediately upon arriving at SSA. I saw the strain the disability caseloads had placed on agency resources. I saw cases that the agency could not process in a timely manner. I saw longer waiting times for claimants. In studying the problem, I believed we could improve the situation by reinventing the claims process. We could replace a process that was too fragmented, too inefficient, too slow.

We have taken two important steps. First, we have made immediate gains by investing in short-term initiatives to improve disability claim processing. The results are positive. Processing times are no longer getting longer, they're getting shorter. When I arrived at the Social Security Administration in fiscal year 1994, the average processing time for an initial disability daim was 97 days. In fiscal year 1996, it will be down to 62 days.

Secondly, we are "reengineering"- radically redesigning- the disability process. This effort will result in fewer steps needed to process a claim, fewer people handling each claim, quicker and more accurate decisionmaking, and more efficient service to those who apply for disability benefits.

I want to add, Mr. Chairman, that we are also intensifying efforts to ensure that the only people who receive disability benefits are those who are eligible for them by law. The year before I was appointed to this position, the Social Security Administration performed less than 116,000 continuing disability reviews. Our proposed fiscal year 1996 budget establishes, for the first time ever, a line item for disability reviews and calls for sufficient funding to conduct 431,000 reviews.

Improved customer service also involves enhanced public access to Social Security. We're achieving this in several ways. Later today, we will have a press conference to announce the start of a multi-year effort to provide Personal Earnings and Benefit Estimate Statements to tens of millions of American workers. This year alone, we will send nine million statements to persons age 60 and over who are still working and are not yet receiving Social Security benefits. By the year 2000, we will have them in the hands of over 123 million working citizens over the age of 25.

I also made the decision to devote the additional resources to improve SSA's telephone service. We are enhancing telephone access by making more efficient use of existing personnel and facilities. Through automation, for example, we were able to expand the productivity of one of our data processing centers, enabling it to do its own work as well as that of two other centers. That made it possible for us to begin transferring approximately 400 of our employees into telephone service positions answering incoming 800 number calls.

There are a number of other initiatives that have brought major improvements to the agency. We have rewritten the majority of our letters to beneficiaries to make them more readable and understandable. We have improved conditions in our inner city offices to ensure that our employees and customers can conduct business in safety and comfort. We have hired more bilingual and multilingual employees to serve an increasingly diverse population. We are reducing supervisor-to-employee ratios by 50 percent and placing a greater proportion of SSA employees into direct customer service positions.

Mr. Chairman, as important as these steps are, we must also continue to look to the future.

SSA has a long-term strategic plan that has frequently been called one of the best in government. And we have just released our general business plan that provides, in detail, a five-year blueprint for the agency.

We are in the midst of a five-year, $1.1 billion automation investment plan that, when completed, will enable us to place intelligent workstations on the desks of our field office employees. With these tools, which will link field offices to each other and to SSA's central records, services will become faster and more efficient while maintaining the highest level of quality.

And while I am discussing the future, I would like to share a few thoughts with you about a question very much on the minds of today's young and middle-aged workers. Will Social Security be there for them when they retire in the 21st century?

We do not, as some have suggested, have a Social Security program that is in fiscal crisis at this time. Neither, though, do we have a situation about which we should be satisfied or complacent.

According to the most recent report by the Social Security board of trustees, there will be sufficient funds in the Social Security reserves to pay benefits until the year 2029, 34 years from now. "While we do not have an imminent crisis, we do owe it to today's younger families and to future generations to start determining how we will extend Social Security's lifespan farther into the 21st century and beyond.

A privately-sponsored survey of 1,100 non-retired Americans conducted in 1994 found that the pub1ic is divided between loyalty and deep skepticism toward Social Security. Some of this skepticism can be attributed to the fact that only 21 percent of the survey's respondents believe they have a good understanding of how Social Security works.

Mr. Chairman, I believe strongly that we need to engage and involve the American public in a nationwide discussion about the future of Social Security. We need to educate the public about Social Security, how the system works, how it is self-financed, and the financial protection it offers them. We need to have candid discussions about the system's future. We need to lay out the options that will enable us to strengthen Social Security's long-tenn solvency, and hear from the American people what changes they would be willing to accept and supporL And then we need to move forward with proposals to strengthen and solidify the system.

Providing that public education and engaging the public in that essential discussion will be one of my highest priorities as Commissioner of the independent Social Security Administration. Protecting the public's trust and investment in Social Security is the greatest responsibility I have as Commissioner. And to fulfill that responsibility, I pledge to do everything within my power to assure citizens of all ages that Social Security will not let them down.

In these efforts, I look forward to working with each ofyou,with your colleagues in both houses, and with the Administration. The Social Security program has always enjoyed broad-based, bipartisan support and I will do everything I can to maintain our close partnership on behalf of the program and the people it serves.

On March 31, Mr. Chairman, we begin a new chapter in SSA's history. The change will make a more stable, more visible, more accountable institution. One thing will not change, however, and that is our pledge- and I know I speak on behalf of the 65,000 dedicated public servants who work for Social Security- to fulfill our responsibilities to the working men and women who look to Social Security to help safeguard their financial future. This is our pledge as an agency, and it is my commitment as Commissioner.

I will be pleased to answer your questions.